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US government seeks 'tens of millions of dollars' in damages from Lance Armstrong

Jim Slater

US Postal Service sponsored Lance Armstrong and his team between 2001 and 2004. Photo: Reuters

WASHINGTON: Seeking "tens of millions" paid to Lance Armstrong for "years of broken promises", the US government joined a lawsuit Friday alleging the doping cyclist defrauded former sponsor US Postal Service.

The government filed paperwork in federal court to join a lawsuit by Floyd Landis -- a former Armstrong teammate stripped of the 2006 Tour de France crown for doping -- after talks with Armstrong over damages issues broke down.

"Lance Armstrong and his cycling team took more than $US30 million from the US Postal Service based on their contractual promise to play fair and abide by the rules -- including the rules against doping," said Ronald Machen, US Attorney for the District of Columbia.

"This lawsuit is designed to help the Postal Service recoup the tens of millions of dollars it paid out to (Armstrong's) cycling team based on years of broken promises."

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US Postal, which did not sponsor the last of Armstrong's seven stripped triumphs, paid $31 million in sponsorship fees from 2001-2004.

"In today's economic climate, the US Postal Service is simply not in a position to allow Lance Armstrong or any of the other defendants to walk away with the tens of millions of dollars they illegitimately procured," Machen said.

Landis claims Armstrong and manager Johan Bruyneel defrauded taxpayers and the government by having Armstrong and other riders use performance-enhancing drugs as Armstrong won a record seven Tour de France titles from 1999-2005.

Armstrong, 41, was stripped of those titles last year after the US Anti-Doping Agency (USADA) uncovered overwhelming evidence, with testimony from 26 witnesses, that he was at the heart of a major doping conspiracy.

Armstrong admitted to being a dope cheat in a television interview with Oprah Winfrey last month.

"The Postal Service has now seen its sponsorship unfairly associated with what has been described as 'the most sophisticated, professionalised, and successful doping program that sport has ever seen,'" Machen said.

Financial hardships, caused in part by a federal requirement to pre-fund employee pensions, have the US Postal Service planning to cut Saturday delivery of mail in August.

Landis, who himself admitted to doping, filed his lawsuit under the False Claims Act, which allows citizens to sue for alleged fraud against the government and receive as much as a third of any money recovered.

The law allows for the recovery of treble damages or, in Armstrong's case, triple the sum of the US Postal sponsorship.

The US Justice Department move came two days after Armstrong told USADA he would not testify under oath about the details of the doping scheme, but he might have to provide such testimony if the lawsuit leads to a court trial.

That could help USADA's ongoing look into Bruyneel and other details about how Armstrong got away with such a major doping conspiracy for so long without being stopped by the International Cycling Union (UCI).

The US government, which will file its formal complaint within 60 days, is only joining the case against Armstrong, Bruyneel and the Tailwind team entity run by Armstrong, and not against several other defendants named in the suit.

"Today's action demonstrates the Department of Justice's steadfast commitment to safeguarding federal funds and making sure that contractors live up to their promises," deputy assistant attorney general Stuart Delery said.

Armstrong had tried to settle the matter with US lawyers but failed because his attorneys claim US Postal benefitted from increased publicity as a sponsor associated with Armstrong during his days of glory.

"Lance and his representatives worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged," Armstrong attorney Robert Luskin said in a statement.

Armstrong's camp also made public studies from 2002-2005 that valued the publicity benefits of the sponsorship deal at more than 300 percent of the money invested every year.

"The Postal's Services own studies show that the Service benefited tremendously from its sponsorship -- benefits totaling more than $100 million," Luskin said.

But there was no look at how links to the doping revelations of the past year might harm the US Postal Service's reputation.

"It is critical that public confidence in contractor performance remains high," said US Postal Service Inspector General David Williams.

"When that public trust is compromised, as occurred in this case, the Office of Inspector General will fully investigate."

In addition to the Landis lawsuit, Armstrong was sued on February 7 by a Texas insurance firm seeking $12 million for bonus money paid to the cyclist for Tour de France triumphs that no longer exist.